AAVE Soars as Senate Pushes Stablecoin Bill Forward

Plus, 🇦🇷 LIBRA scandal probe shut down, 👊 Unicoin execs hit with $110M fraud charges, ⚖️ Bancor sues Uniswap, and more!

Author

Juan Aranovich
May 21, 2025

Hi! In today’s edition:

  • 🟢 Stablecoin bill boosts AAVE

  • 📉 That bill looks great — if you’re a megacorp

  • ❌ Argentina’s leader ends LIBRA probe

  • 👨‍⚖️ Unicoin faces SEC fraud charges

  • 🪙 Bancor sues Uniswap in patent clash

On the podcast:

  • Bits + Bips: What’s the outlook for crypto?

  • Unchained: The rise of Farcaster’s mini-apps

By Tikta and Steve Ehrlich

DeFi protocol Aave’s native token, AAVE, surged more than 20% on Tuesday and is up almost 90% over the past month after the U.S. Congress advanced landmark stablecoin bill the GENIUS Act.

The rally propelled AAVE to multi-month highs above $269, outperforming much of the broader crypto market. The token has since retreated slightly to trade at around $257 as of 1 a.m. ET on Wednesday.

Market participants view the GENIUS Act passing a preliminary vote in the U.S. Senate as one of the key drivers of the rally, given that a framework for stablecoin regulation would benefit DeFi protocols such as Aave that are central to the stablecoin economy.

Aave’s total value locked has also reached a record high, jumping to $24 billion and accounting for one-fifth of all TVL in DeFi.

Stablecoins are about as perfect a business as one can get. Customers give you money, you issue them a token representing $1, and then you can invest that stockpile of money in U.S. treasuries and other short-term holdings.

You don’t have to share any of the profits with customers. In fact, according to the text of the GENIUS Act, which achieved cloture in the U.S. Senate Monday night, it would be illegal to do so. 

What’s more, people hardly ever ask for their money back, so their bankroll keeps going up. 

The two largest stablecoins, Tether (USDT), with a market cap of $151.3 billion, and USD Coin (USDC), at $60.26 billion, account for over 87% of the $238.7 billion stablecoin market.

So, why did lawmakers ban yield sharing, and who really stands to gain from locking out consumers?

Argentina’s president, Javier Milei, has officially dissolved a special investigative task force investigating the LIBRA memecoin scandal, at the center of which is his own promotion of the cryptocurrency in February.

The task force was set up just days after Milei publicly endorsed the Solana-based token on social media, triggering a meteoric rise in the coin’s market capitalization, which peaked at more than $4.5 billion before crashing more than 97% within hours.

The collapse resulted in estimated losses of up to $250 million for investors, with accusations that insiders ― including associates of the token’s creators ― profited to the tune of more than $100 million through pump-and-dump tactics.

The dissolution was formalized in Decree 332/2025, signed by Milei and Justice Minister Mariano Cúneo Libarona, and published in Argentina’s official gazette on Tuesday. 

The decree claims that the task force has “fulfilled its purpose” by gathering information and forwarding its findings to the Public Prosecutor’s Office.

The U.S. Securities and Exchange Commission has charged Unicoin and three of its senior executives with orchestrating massive fraud that raised more than $100 million from thousands of investors.

The SEC’s complaint targets CEO and Board Chairman Alex Konanykhin, former Board Chairwoman Silvina Moschini, and former Chief Investment Officer Alex Dominguez.

It alleges that Unicoin and its executives made a series of false and misleading statements to market and sell “rights certificates” that purportedly entitled investors to receive Unicoin tokens in the future.

The firm claimed that its tokens would be backed by billions of dollars in real estate and equity interests in pre-IPO companies. In reality, the company’s actual real estate holdings were worth only a small fraction of what was advertised, and many of the touted acquisitions never closed.

Although Unicoin claimed to have sold more than $3 billion of rights certificates, the SEC found that no more than $110 million had actually been raised. 

Decentralized finance platform Bancor has filed a lawsuit against Uniswap, the biggest decentralized exchange in the crypto space by trading volume, alleging that it has used its patented technology.

In a lawsuit filed in the U.S. District Court for the Southern District of New York, Bancor alleges that Uniswap has used its constant product automated market maker (CPAMM) model, without authorization since Uniswap’s launch in November 2018.

The CPAMM model is foundational for DEXes, enabling permissionless onchain token swaps through smart contracts, replacing traditional order books and centralized market makers.

Bancor said it invented the CPAMM mechanism in 2016, applying for patents in January 2017 and receiving two patents later that year. The protocol claims that Uniswap has "profited greatly" from its use of CPAMM without permission, license, or partnership.

Uniswap founder Hayden Adams described the lawsuit as “possibly the dumbest thing [he’s] ever seen,” adding that he looks forward “to not thinking about this again” until a lawyer tells him he’s won.

Uniswap’s total value locked is less than half of its 2021 peak, but it still dominates the market with $4.87 billion. Bancor’s TVL stands at a much lower $59 million.

The panel discusses Moody’s downgrade of U.S. debt, why the Fed may hold off on rate cuts, how markets are pricing risk, and Coinbase’s new milestone.

U.S. credit got downgraded. Fed policy expectations are flipping. And Coinbase hit the S&P 500 (while also being extorted).

What does all of this mean for crypto?

On this week’s Bits + Bips, James Seyffart, Alex Kruger, Ram Ahluwalia, and Noelle Acheson break down:

  • Why the Moody’s downgrade doesn’t mean much for markets

  • Whether Fed rate cuts are now further away than expected

  • Why Alex says Coinbase is a “horrible product” despite S&P inclusion

  • How stablecoins tie in to U.S. geopolitical strategy

  • Whether Circle should sell to Coinbase

  • And what the altcoin ETF delay really tells us

Plus: unemployment, yield curve control, the “Consensus vibes,” and Ram’s wild anecdote about workers gaming unemployment benefits.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

Linda Xie on How Mini-Apps Are Helping Farcaster Take on Web2 Social Media

From Coinbase to crypto VC to Farcaster, Linda Xie has had a storied career. She explains legacy social media’s failures and how mini-apps and open social graphs can resolve them.

​​Legacy social media platforms lock you in, control your audience, and exploit your data.

Farcaster aims to fix those problems. But how can it attract developers and users in an already saturated media environment?

Developer Ecosystem Lead Xie joins the show to explain:

  • How Farcaster addresses social media’s structural flaws

  • How Farcaster’s mini-app ecosystem is helping to grow the user base

  • The most popular apps taking off on the platform

  • How the whole crypto community could benefit from gathering on Farcaster

  • Why she believes crypto communities belong on open, portable networks

  • And why her family’s history helped her grasp the significance of Bitcoin in 2011

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

  • 🫰 Tron founder Justin Sun on Tuesday confirmed that as the top TRUMP memecoin holder, he’ll attend a private Trump gala this week, an event tied to the coin’s top 220 buyers and criticized by lawmakers as a potential “pay-to-play” scheme.

  • 🏛️ Texas lawmakers advanced a bill on Tuesday to establish a state-managed Bitcoin reserve in a 105-23 vote, potentially making it the Lone Star State the second U.S. state after New Hampshire to use digital assets as an inflation hedge and fiscal buffer.

  • 🇮🇳 India’s Supreme Court this week criticized the central government for failing to finalize long-promised crypto regulation, warning that unregulated trading poses risks similar to informal underground hawala funds transfer networks.

  • 🗽 New York City Mayor Eric Adams on Tuesday announced the formation of a digital asset advisory council aimed at using blockchain for vital city records and crypto for service payments, as part of a push to bring fintech jobs and long-term investment to the city.

  • 💼 Theta Capital secured $175 million for a crypto-focused fund-of-funds targeting early-stage blockchain VCs, adding to its $1.2 billion in assets under management as venture activity in digital assets sees renewed momentum.

  • 📲 Backed by $11 million in new funding from investors such as PayPal Ventures, True Markets launched a noncustodial Solana-centric crypto trading app aimed at retail users, expanding on its existing institutional platform, TrueX.

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